This document provides 5 tips for improving cash flow in tough financial times: 1) Consider price discounts or increases while knowing your gross margins. 2) Grow leads and conversion rates to increase customers and sales. 3) Sell 20% more to existing customers to double turnover in 4 years. 4) Changing 3 areas like sales, costs, and expenses each by 5% can increase profits by 61%. 5) Closely monitor debtors to improve cash flow and collection of owed payments. The document emphasizes knowing your business numbers to manage it effectively and working to get results through sales and profit growth.

1. On having
GREAT Cash Flow
5 HOT Tips
In Tough Financial Times

2. How is Business for YOU?
Business A Business B
Know the Numbers – then you can manage it

3. How is Business for YOU?
Business A
Know the Numbers – then you can manage it
Work to get RESULTSWork to get RESULTSWork to get RESULTSWork to get RESULTS ----
1. Price Discount or Increase
2. Sales and Profit Growth
3. Sell 20% more
4. Change 3 Areas
5. Manage Debtors

4. 1. Price Discount or Increase
If You need to
DOUBLE Sales for same
$ Gross Margin result
- would it be worth the
effort?

5. 1. Price Discount
Eg If you Discount 10%
and your Gross Margin is 20%
You need to
DOUBLE Sales for same
$Gross Margin $ result!!!

6. 1. Price Discount

7. 1. Price Discount or Increase
Can you LOSE Sales
And still get
the same $ result
- How can that work ?

8. 1. Price Increase
Increase 10% Prices
You can
LOSE 20% Sales
And still get the
same $ result!!

9. 1. Price Increase

10. 1. Price Increase
• Do you know your Gross Margins?
• Do you have a copy of Discount Tables when
deciding sales and pricing
• Have you checked your Costings in last 6-12
months?
• Where can you easily find Gross Margin in
MYOB, Reckon, Quickbooks?? – see next…

11. MYOB
To Get Report –
(> means click)
>Reports
>Index to Reports
>Accounts
>Profit & Loss +
YTD Year to Date
>Customise Dates

12. Quickbooks
To Get Report –
(> means click)
>Reports
>Company & Financial
>Display
>Modify Report top LHS
>Dates
>Tick % of Sales
>Tick YTD if desired
>Ok

13. 2. Leads & Conversion Growth
Step Regular Increase 10% Notes / Result
Leads
Conversion
= Customers
X Num.
Transactions
X Aveg Dollar Sale
= Turnover
X Margin
= Gross Profit

14. 2. Leads & Conversion Growth
Step Regular
Leads 4000
Conversion 25%
= Customers 1000
X Num.
Transactions
2
X Aveg Dollar Sale $100
= Turnover $200,000
X Margin 25%
= Gross Profit $50,000

15. 2. Leads & Conversion Growth
Step Regular Increase 10% Notes / Result
Leads 4000 4400
Conversion 25% 27.5%
= Customers 1000 1210
X Num.
Transactions
2 2.2
X Aveg Dollar Sale $100 $110
= Turnover $200,000 $292,820
X Margin 25% 27.5%
= Gross Profit $50,000 $80,525

16. 2. Leads & Conversion Growth
Step Regular Increase 10% Notes / Result
Leads 4000 4400 Most Costs Here
Conversion 25% 27.5% Sell – Listen
= Customers 1000 1210 21% increase
X Num.
Transactions
2 2.2 Encourage Return
X Aveg Dollar Sale $100 $110 Upsell other items
= Turnover $200,000 $292,820 46% increase
X Margin 25% 27.5% Increase Price 10%
= Gross Profit $50,000 $80,525 61% increase !!!

17. 3. Sales Growth
Sell 20% more to
EXISTING customers
& you can DOUBLE
Turnover in 4 years…

18. 3. Sales Growth
How to Sell 20% more – ideas –
• Bundle Services or Products to increase
– perceived value
• Encourage frequent return to purchase eg loyalty cards, set
price maintenance, want brushes with that paint?
• Pre-sell eg place a deposit for Christmas and secure your item
before the rush
• Offer a low-cost but high perceived value item eg Books of
Tips and Tricks (create once, sell/offer 100s times)

19. 4. Change 3 areas 5% = Profit 61% up!
Change 3 areas Gives Result
Sales 100,000
Cost of Sales 40,000
Gross Profit 60,000
Expenses 45,000
Operating
Profit
15,000

20. 4. Change 3 areas 5% = Profit 61% up!
Change 3 areas Gives Result
Sales 100,000 Up 5%
Cost of Sales 40,000 Down 5%
Gross Profit 60,000
Expenses 45,000 Down 5%
Operating
Profit
15,000

21. 4. Change 3 areas 5% = Profit 61% up!
Change 3 areas Gives Result
Sales 100,000 Up 5% 105,000
Cost of Sales 40,000 Down 5% 38,000
Gross Profit 60,000 67,000
Expenses 45,000 Down 5% 42,750
Operating
Profit
15,000 24,250

22. 4. Change 3 areas 5% = Profit 61% up!
Change 3 areas Gives Result
Sales 100,000 Up 5% 105,000
Cost of Sales 40,000 Down 5% 38,000
Gross Profit 60,000 67,000
Expenses 45,000 Down 5% 42,750
Operating
Profit
15,000 24,250 61.66%
increase!

23. 5. Debtors – Remember to Monitor
Are those who owe you money
increasing?
• Profit is not cash until you are paid
• Statistics show : chance of collection
– A debt that is 3 months old
– it has has 72% chance of collection
– Or 6 months old - 56%
– 9 months 43%
– 12 months 28%

24. How is Business for YOU?
Become Business A !
Know the Numbers – then you can manage it
Work to get RESULTSWork to get RESULTSWork to get RESULTSWork to get RESULTS ----
1. Price Discount or Increase
2. Sales and Profit Growth
3. Sell 20% more
4. Change 3 Areas
5. Manage Debtors

25. ACTION LIST
Need to Get Discount Table
Need to Get Price Rise Table
Need to review our Gross Margins
Need to review Sales & Profit
Need to aim to sell 10-20% more to Current
Customers
Need to check Costings
Need to Review Debtors
Need to meet with…………………………….